UPDATE 1-Ex-Goldman Sachs programmer loses bid to overturn conviction

Reuters Staff

3 Min Read

(Adds comment from district attorney)

By Brendan Pierson

NEW YORK, May 3 (Reuters) - New York’s highest court on Thursday refused to overturn former Goldman Sachs Group Inc programmer Sergey Aleynikov’s criminal conviction of stealing computer code from the investment bank when he left for another job.

In the latest development of a case that partly inspired Michael Lewis’ bestselling book “Flash Boys” on high-frequency trading in the U.S. equity market, the New York Court of Appeals rejected Aleynikov’s argument that the code was not “tangible,” and thus not covered by a state law criminalizing “unlawful use of secret scientific material.”

“This unanimous decision makes abundantly clear that unlawful appropriation of intellectual property is a crime, whether that information is obtained by traditional or more modern means,” Manhattan District Attorney Cyrus Vance said in a written statement.

“We are disappointed in the Court of Appeals decision,” said Kevin Marino, Aleynikov’s lawyer.

However, Marino said the decision left room for a new motion to overturn the conviction for unlawful use of secret scientific material. He cited grounds that the jury had been told that “tangible” could mean “capable of being understood by the mind,” and the appeals court did not adopt that definition. He said he was “confident” that motion would succeed.

Aleynikov, 48, was arrested on federal charges in July 2009 and convicted in December 2010, only to be exonerated by a federal appeals court in February 2012 after serving 11 months of an eight-year prison sentence.

Vance then filed state criminal charges against Aleynikov in August 2012. He was convicted by a jury in May 2015, but the judge who presided over the trial overturned the verdict, finding the copied code was not tangible.

However, the Appellate Division, First Department, a mid-level state appeals court, reinstated the conviction in January 2017, saying a copy on a disk could be tangible. The Court of Appeals agreed to review the case in April 2017.

Aleynikov, a Russian-born U.S. citizen, has said he intended the code only for his own use. (Reporting By Brendan Pierson in New York; Editing by Cynthia Osterman)